Vertical Equity Refers to the Idea That

question 160

Multiple Choice

Vertical equity refers to the idea that

• A)people with greater ability to pay should pay more.
• B)people who are situated differently should pay differently but in a manner deemed fair by society.
• C)people who are situated equally should pay equally.
• D)the people who derive the benefits from services should be the ones who pay for the services, provided they have the ability to pay.

---

Definitions:

Capital Expenditures

Long-term investments made by a company in buildings, equipment, or other assets to improve or maintain its business operations.

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and operational efficiency.

Free Cash Flow

The amount of cash generated by a business after accounting for operating expenses and capital expenditures, available for distribution among shareholders.

Interest Expense

The cost incurred by an entity for borrowed funds, typically stated as an annual rate.